Klaveness Combination Carriers (KCC) has reported another successful quarter, driven by efficient trading within the CABU fleet and a strong product tanker market. The second quarter of 2024 stands out as one of the most profitable in the company’s history, with record-high TCE earnings for both CABU and CLEANBU segments. This strong performance has allowed KCC to continue its policy of high dividend distributions, with a quarterly dividend of USD 0.30 per share.
CEO’s Commentary
CEO Engebret Dahm highlighted the robust market conditions and exceptional CABU TCE earnings as key factors in KCC’s strong second-quarter results. He expressed confidence in KCC’s ability to maintain solid operational and financial performance, citing the company’s diversified market exposure and fleet flexibility. Despite ongoing volatility in the product tanker market, KCC remains well-positioned to deliver attractive quarterly dividends to its shareholders.
Fleet and Operations
KCC operates a fleet of 16 combination carriers designed for the efficient transportation of both wet and dry bulk cargoes. These vessels are strategically deployed in trades that minimize ballast and capitalize on trade flow imbalances, allowing for optimized operations.
Second Quarter 2024 Highlights
KCC achieved an EBITDA of USD 36.2 million for Q2 2024, slightly down from USD 37.6 million in Q1 2024, and an EBT of USD 25.1 million. This resulted in record-breaking half-yearly financial results for the company. The CABU fleet delivered record-high TCE earnings of $37,656/day, supported by a strong MR tanker market and efficient trading. Meanwhile, CLEANBU TCE earnings remained robust at $39,093/day, making it one of the best quarters for the CLEANBU segment.
KCC renewed a fixed-rate dry bulk contract out of Australia for 2025, securing higher volumes and rates. The quarterly dividend of USD 0.30 per share, totaling approximately USD 18.1 million, reflects the company’s ongoing commitment to delivering high returns to its shareholders.
Financial Performance and Dividend Policy
The fleet’s average TCE earnings for the quarter were $38,376/day, driven by strong performance in the product tanker market and solid dry bulk earnings. Despite the temporary reduction in earnings guidance for Q3 2024 due to a weaker product tanker market and uneven caustic soda cargo volumes for the CABUs, KCC remains optimistic about the future. The company has distributed an aggregated amount of USD 75.6 million in dividends over the last four quarters, bringing the total to USD 185.4 million since its listing in 2019.
Environmental Performance
The carbon intensity (EEOI) of the KCC fleet was 6.9 for Q2 2024, consistent with the previous quarter. The CLEANBU fleet’s ballast days, influenced by strategic decisions to leverage the strong tanker market, impacted this figure. However, the CABU fleet maintained a high level of combination trading, keeping its EEOI in line with the 2024 target.
Outlook
Looking ahead, KCC has provided TCE earnings guidance for Q3 2024, anticipating $28,000-29,000/day for the CABUs and $33,500-35,500/day for the CLEANBUs. While a temporary dip is expected due to weaker market conditions, KCC’s high efficiency, market diversification, and operational flexibility ensure the company is well-positioned to continue delivering strong financial results and substantial dividends in the future.
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Source: Klaveness Combination Carriers
